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Have You Invited All the Right Parties to Your Easement Lawsuit?

Newly built housing area in BavariaLitigation over easement rights is a common occurrence in Oregon. In their most typical form, these lawsuits are filed as declaratory judgment actions under Oregon’s Uniform Declaratory Judgment Act, ORS 28.010 et seq. As easement rights can span a number of properties and touch upon the property interests of many parties, the attorney filing the lawsuit is faced with the question of who must be named as defendants. The title holders to the affected properties are obviously necessary parties, but what about holders of lesser property rights, such as easements?

No one wants to unnecessarily drag their neighbors into a lawsuit. However, failure to join all the necessary parties could lead to years of litigation without any substantive resolution of the case. The recent decision by the Oregon Court of Appeals in Miller v. Shenk, 272 Or App 12 (2015) is an illustration of this scenario. In this case, the failure to name all the proper parties resulted in dismissal of the lawsuit without resolution of the substantive dispute, despite three years of litigation.

In Miller, the defendants owned a five-acre parcel in Lane County, which they accessed over an easement on the neighboring property owned by the Mattoxes. The plaintiff, Miller, owned the adjacent 15-acre parcel, but did not hold deeded access to a public road over defendants’ or the Mattoxes’ properties. The Arnolds owned the 20-acre lot to the south of defendants’ and plaintiff’s parcels, and they did have a deeded access easement to the public road over defendants’ and the Mattoxes’ property. The plaintiff filed suit solely against the defendants, seeking to establish an implied easement based on existence of roadway, since the time plaintiff’s and defendants’ properties were held as one parcel. The plaintiff did not name the Arnolds or the Mattoxes in the lawsuit. After a trial on the merits, the trial court ruled that an implied easement in favor of plaintiff existed over the defendants’ property.

On appeal, defendants challenged the trial court’s jurisdiction, arguing that plaintiff failed to join two indispensable parties – the Arnolds and the Mattoxes. The failure to join a party in a declaratory judgment action is jurisdictional. The Court of Appeals agreed that the Arnolds (but not the Mattoxes) were indispensable parties. The Court reasoned that, because the Arnolds held an express easement over the roadway on defendants’ property, upon which plaintiff sought to establish an implied easement, the decision of the trial court directly affected the Arnolds’ property interests. For this reason, the Arnolds were indispensable parties and the Court dismissed the action for lack of jurisdiction.

Interestingly, the Court found that the Mattoxes were not indispensable parties, even though the plaintiffs must cross over their property to reach a public road. In explaining its reasoning, the Court distinguished its decision in Vance v. Ford, 187 Or App 412 (2003), which similarly dismissed a declaratory judgment action for failure to join an indispensable party. In that case, joinder was necessary not only to protect the interests of absent parties, but also to “protect the certainty of the judgment.” In Vance, determination of the missing party’s property rights was required to establish the court’s right to grant the relief sought by the plaintiff. Thus, the missing party was necessary to “protect the certainty of the judgment.” In Miller, the Mattoxes’ property rights were not at issue and no question involving the Mattoxes’ property rights needed to be resolved for the trial court to grant plaintiff’s implied easement rights. Therefore, the Mattoxes were not a necessary party.

The Miller case highlights the importance of a careful analysis of all the property interests that may be affected by the disputed easement prior to filing a declaratory judgment action. All persons with property rights in the disputed land, whether they hold title in fee or enjoy easement rights, must be joined in the lawsuit. Moreover, if determination of a neighboring property owner’s rights is necessary to the resolution of the primary dispute, then that property owner must also be named to “protect the certainty of a judgment.” Because the failure to join the proper parties is jurisdictional, it can lead to a colossal waste of time and resources – both the parties’ and the court’s.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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